Microsoft Inks Deal To Bundle Office Apps in Android Devices

In an intellectual property deal signed this week, low-cost device maker Xiaomi will allow Microsoft to put Office and Skype on its Android-based smartphones and tablets.

According to a joint announcement by the companies, Xiaomi's devices will be sold with Microsoft Excel, Outlook, PowerPoint, Word and Skype applications preloaded starting this September. Xiaomi's "Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3" products will come with those apps included.

Xiaomi sells mobile devices in China and India, but it's also working on globally expanding its products, according to an article published by The Wall Street Journal. Xiaomi is looking to sell its smartphones in the U.S. market, although not this year, per the article.

This deal is characterized as a "cross-license and patent transfer agreement" by the two companies, although it's a little different. Microsoft's has struck many such intellectual property deals with hardware makers using the open source Android operating system, fostered by Google. Typically, the hardware company pays Microsoft royalties for using certain software capabilities, with few exceptions. However, in this case, Xiaomi is reportedly buying 1,500 of Microsoft's patents related to video, wireless and other technologies, per the WSJ account.

While that approach seems unusual, the WSJ article cited a Microsoft legal spokesperson as saying that Microsoft periodically sells some of its 60,000 patents.

Microsoft has generally been moving away from the mobile device hardware manufacturing business after acquiring device maker Nokia two years ago. Its latest shift in that direction was an announcement this month of a $1 billion write down and hundreds of job cuts, mostly affecting its Nokia Mobile Oy operations in Finland.

In that announcement, Microsoft signaled it was putting more emphasis on getting Office onto other operating system platforms as part of its mobile strategy. Terry Myerson, head of Microsoft's Windows and Devices Group, explained at that time that Microsoft was "scaling back," but wasn't wholly out of the smartphone business. Microsoft's fortunes on the mobile OS side have been grim of late, slipping below 1 percent in Q1 this year.

The Xiaomi deal will potentially extend Microsoft Office apps to "tens of millions of customers and business customers in China, India and around the world," per the companies' joint announcement.